Financial Guidance to Help Your Business Succeed

Congratulations on your forthcoming marriage! While your biggest financial concern these days may be wedding costs, marriage introduces several potential money complications. Be sure to discuss the following subjects, as applicable, with your betrothed before you tie the knot.

Credit and debt. Do you know your future spouse’s credit score? Or how much consumer debt he or she carries? Once you’re married, your spouse’s financial history can affect your ability to qualify for a mortgage and make other major joint purchases. So exchange credit reports and come clean on any money-related “secrets” now.

Marriage penalty. If both you and your new spouse work, marriage may bring a tax “penalty.” Because the middle and top tax brackets for married couples aren’t twice as big as those for singles, you might be pushed into a higher tax bracket. To help avoid this, consider taking additional tax-saving steps before year end.

Prenuptial agreement. A prenuptial agreement can be a good idea for individuals with considerable wealth, ownership in a business, children from a previous marriage or family heirlooms they want to keep in the family. In a nutshell, prenups determine which property should remain separate and which should be distributed equitably (or in accordance with the laws of your state) during a divorce.

QTIP trust. If you have children from a previous marriage, you may want to set up a qualified terminable interest property (QTIP) trust. A QTIP trust qualifies for the estate tax marital deduction, so any assets you transfer to it won’t be taxed on your death. The trust provides your surviving spouse with income for life, but the principal is maintained for your biological children or any other beneficiaries you name.

To head off money-related conflicts, consider meeting with a financial professional to discuss how the two of you plan to combine bank accounts, share assets and investments, manage household finances and make major financial decisions. Some financial professionals specialize in premarital counseling and encourage prospective spouses to discuss such topics as financial ancestry (how their parents handled money), control issues and future wealth expectations.